Thoughts from Dave Mead and discussion about issues and concerns for Small and Mid-size Businesses. Some discussion topics will include strategic planning and execution, improving profitability and cash flow, maximizing value for exit.

Friday, June 26, 2015

Seeley International Acquires Coolerado

Acquisition converges the world’s leading indirect evaporative air
conditioning technologies and establishes a US manufacturing presence
demonstrating Seeley’s commitment to energy efficiency innovation.Adelaide, Australia - Seeley International acquired
the business of Coolerado Corporation, a Denver-based manufacturer of
innovative, award-winning, air conditioning systems for commercial,
industrial, government, and military use.

“The addition of
Coolerado’s innovative and award-winning products to our portfolio
demonstrates our commitment and leadership in providing energy efficient
air conditioning products,” said Frank Seeley AM, Seeley
International’s founder and Executive Chairman. “This acquisition
establishes a US-based manufacturing facility which is another exciting
step in our growth strategy as we look to move closer to our North
American customers.”
Coolerado’s indirect evaporative air conditioning products will
become a part of Seeley’s portfolio that includes the trusted brands,
Breezair, Convair, Coolair, Braemar, and Climate Wizard. “Climate
Wizard and Coolerado, which are both award-winning indirect evaporative
air conditioning product lines are complementary, offering the best
hyper-efficient air conditioning solutions in the world,” said Frank
Seeley.
“Coolerado’s customers will benefit from Seeley International’s
market experience, product line breadth, financial and customer service
strength, and its commitment to innovation,” said Tom Teynor,
Coolerado’s Chief Executive Officer.

With the acquisition
of Coolerado’s Denver-based manufacturing facility, Seeley International
intends to considerably increase its North American operations with a
multi-million dollar capital injection designed to increase product
availability and customer service.

Seeley International
Seeley International is Australia's largest air conditioning
manufacturer and an innovative global leader in the design and
production of energy-efficient cooling and heating products including
Breezair, Convair, Coolair, Braemar, Climate Wizard, and now Coolerado.
Headquartered in Adelaide, Australia, Seeley has offices in six
countries including the United States, where they have had a local
presence for more than 30 years. Seeley products are sold in over 100
countries. For more information visit www.seeleyinternational.com.Coolerado Coolerado air conditioners reduce
cooling costs using an award-winning, multi-patented and proprietary
cooling technology. Based in Denver, Colorado and backed by a worldwide
network of dealers with units installed in more than 40 countries,
Coolerado manufactures its products in the United States. For more
information visit www.coolerado.com.

Now is a great time to sell a company. But is time running out on the sellers' market?

When is a good time to sell?

CEOs
and business owners routinely ask the question, When is the best time
for me to sell? Is now a good time or should I wait? Truthfully, many
of the folks that address that question (investment bankers, private
equity professionals, financing sources) have a vested interest in
having companies go to market. So business owners can be skeptical when
reading optimistic projections.

We
have advised business owners for years that there are a number of
factors to consider when evaluating if it is a good time to sell a
business. The most important is to make sure your company is prepared,
and to not wait for the "absolute best time" to sell, but to sell when
the market is good. There are lots of examples of companies that have
regretted not going to market in 2006-2007 because they thought the
market for their company would be better in 2009 or 2010.

There
are a number of factors that suggest that 2015-16 is still a terrific
time for lower middle market company owners to sell.

1. Company results have rebounded or stabilized. Most
lower middle market companies have rebounded or at least stabilized
from the downturn. Even if revenue growth in some sectors is still very
moderate, most companies have done an excellent job of managing
expenses and increasing cash flow.

2.Valuations are high.With stock market at record levels, the prices (multiples of EBITDA) being paid for good companies are at high levels.

3.Interest rates are still low.

This is important since the buyer of your business need to borrow for the transaction.

4.Private equity firms have plenty of dry powder and fewer distractions from older investments. Many
private equity firms spent the years in 2013-14 selling their
portfolio companies. They now have lots of capital to invest and need
to put that capital to work by buying companies. They also can focus
most of their attention on looking for new opportunities.

According
to a 2014 survey of 1000 dealmakers conducted by KPMG and Merger &
Acquisitions magazine, a whopping 77% of respondents expect most of the
M&A activity in the near term to be in the lower middle market
space.

6.Strategic buyers still have lots of cash.Strategic buyers have been accumulating cash in record amounts as they have emerged from the downturn lean and more productive.

7. Strategic buyers need to find new ways to grow.

Sources
of organic (internal) revenue growth have been difficult for most
strategics. They are under pressure to acquire companies that add new
products, new customers, new geographies, and new capabilities.

8.There are still more buyers than sellers in the market.

The number of
baby boomer business owners who are reaching retirement age is
increasing daily. There will come a time when these business owners
need to sell and there may well be a glut of businesses on the market. This has not happened yet. By
2016, there may be as many as 1.5 million business owners who need to
sell to provide liquidity for retirement - even adjusted for new
retirement expectations that changed during the recent downturn.

Is time running out on the sellers' market?A number of clouds loom on the horizon:
When will the Fed begin to raise rates? When will the bull stock market
correct by 20% (or more)? With overall U.S. GDP running in the 2%
range, will a European shock trigger a negative reaction in the U.S.? How
long before the next recession? Consider this fact: The last 3 economic
expansions lasted 7.9 years. We are 6.1 years into this economic
expansion. That means that it is likely we will be having a different
conversation by this time in 2017.

Are you and your company ready to go to market?

Most business owners who have executed a successful sale of their business will tell you the most important thing is: BE PREPARED. It typically takes 6 + months to sell a company and another 12 months (or more) to get prepared.

Selling
a business is very different than operating a business. As a business
owner you know your industry, your product or service, your customers
and your markets. Most business owners will only sell a business once in
their lifetimes - and it can be by far the most important financial
transaction of their lifetime.

________________________________________

The Mead Consulting Group has helped over 60 clients prepare for successful sales transactions ranging from $15M to $350M in transaction value. We
help companies increase the value of their businesses leading up to a
transaction, minimize the things that cause potential buyers to
discount the price, prepare to best position the company, and assist
the owners in building a transaction team.

What successful business owners say about us:

...We
could not have completed the sale of our business without the advice
and guidance of The Mead Consulting Group. Their experience was critical
in helping us prepare, and endure, the transaction process to a
successful outcome. ...Charles M, President, Healthcare IT Company

A
successful process is draining and stressful. The Mead Consulting
Group brought the experience and expertise necessary to help our team
focus on the critical issues and not get caught up in the multitude of
items that can derail a transaction. Why reinvent the wheel? We chose
to take advantage of individuals who could help us understand the
nuances, negotiate effectively, and close the deal. ... Ken W., CEO,
Behavioral Healthcare

...We
missed the opportunity to sell our family business during the last
upcycle. Mead Consulting helped us grow revenue and EBITDA to record
levels and guided us through the selection of a transaction team. Dave
Mead and his group provided great counsel throughout the sales process,
removing obstacles and firmly encouraging us to a great deal with a
strategic buyer that mirrored our family business values. ...Dan M,
President, Building Products Company

...I
do not know why anyone would attempt to sell their business without
Mead Consulting. Since they have owned and sold their own businesses,
they understand the challenges of continuing to run the business while
trying to sell it. Their experience kept us focused on the right things
and they helped keep our transaction team well-aligned during the
process. They truly act as the advocate for the CEO and owner, helping
to make sure that it was the best deal for the owner. ...Ron T, CEO,
Software Business

Welcome to Mead's Issues for Growth

Since 1991, we have been publishing a periodic eLetter "Issues for Growth" that contains articles or thoughts of interest to business owners looking to grow and improve their businesses. We invite your comments and discussion.

About Me

We have been consulting with small and mid-size businesses for over 30 years, helping companies move to the "next level of success" by focusing on strategies that the company can execute well and aligning all activities within the company to those key strategies.
I have started and run 7 companies - a couple of great successes, a few moderate successes, a couple of screaming failures.